The tendency to continue investing in a project, despite mounting evidence that it is not succeeding, often comes about because people mistakenly let sunk costs affect decision making rather than weighing the value of further investment is known as ________.
A) zero-profit condition
B) escalation of commitment
C) progress trap
D) zero-sum game

Question

Quizplus · Accepted Answer

Escalation of commitment refers to the tendency to keep investing in a project despite evidence that it is failing, often because individuals are influenced by the amount of time, money, and resources they have already sunk into the project. In contrast, the other options do not accurately describe this phenomenon. The zero-profit condition refers to the point at which revenues equal costs, the progress trap describes a situation where continued growth and development ultimately leads to decline, and the zero-sum game refers to a situation where one party's gain is directly offset by another party's loss.

The Tendency to Continue Investing in a Project, Despite Mounting